Motorola 2010 Annual Report Download - page 81

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Motorola Solutions, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in millions, except as noted)
1. Summary of Significant Accounting Policies
Principles of Consolidation: The consolidated financial statements include the accounts of the Company and
all controlled subsidiaries. All intercompany transactions and balances have been eliminated.
The consolidated financial statements as of December 31, 2010 and 2009 and for the years ended
December 31, 2010, 2009 and 2008, include, in the opinion of management, all adjustments (consisting of normal
recurring adjustments and reclassifications) necessary to present fairly Motorola Solutions, Inc.’s (the “Company”
or “Motorola Solutions”) consolidated financial position, results of operations and cash flows for all periods
presented.
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.
Motorola Mobility Separation
On July 1, 2010, an initial registration statement on Form 10 was filed with the U.S. Securities and Exchange
Commission (“SEC”) in connection with the Company’s separation into two independent, publicly traded
companies. Amendments to the initial registration statement were filed on August 31, 2010, October 8,
2010, November 12, 2010 and November 30, 2010. On December 1, 2010, the SEC granted effectiveness to the
Form 10.
On January 4, 2011 (the “Distribution Date”), the separation of Motorola Mobility Holdings, Inc. (“Motorola
Mobility”) from Motorola Solutions (the “Separation”) was completed. Motorola Mobility is now an independent
public company trading under the symbol “MMI” on the New York Stock Exchange. On January 4, 2011, the
stockholders of record as of the close of business on December 21, 2010 (the “Record Date”) received one (1) share
of Motorola Mobility common stock for each eight (8) shares of Motorola, Inc. common stock held as of the
Record Date (the “Distribution”). The Separation was completed pursuant to an Amended and Restated Master
Separation and Distribution Agreement, effective as of July 31, 2010, among Motorola, Inc., Motorola Mobility
and Motorola Mobility, Inc. All consolidated per share information presented does not give effect to the
Distribution.
After the Distribution Date, the Company does not beneficially own any shares of Motorola Mobility common
stock and will not consolidate Motorola Mobility financial results for the purpose of its own financial reporting.
The financial information presented in this Form 10-K contains the consolidated position of the Company as of
December 31, 2010, which includes the results of Motorola Mobility. Beginning in the first quarter of 2011, the
historical financial results of Motorola Mobility will be reflected in the Company’s consolidated financial statements
as discontinued operations.
Changes in Presentation
Reverse Stock Split and Name Change
On November 30, 2010, Motorola Solutions announced the timing and details regarding the Separation and
the approval of a reverse stock split at a ratio of 1-for-7. Immediately following the Distribution of Motorola
Mobility common stock, the Company completed a 1-for-7 reverse stock split (“the Reverse Stock Split”) and
changed its name to Motorola Solutions, Inc. All consolidated per share information presented gives effect to the
Reverse Stock Split.
Networks Transaction
On July 19, 2010, the Company announced an agreement to sell certain assets and liabilities of its Networks
business to Nokia Siemens Networks B.V. (“NSN”) for $1.2 billion in cash (the “Transaction”). The Transaction is